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Electronic Arts (EA)
NASDAQ:EA
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Electronic Arts Inc.
(NASDAQ:EA)
76Outperform
Positive Factors
Long-term Growth
Accelerated adoption of digital games and live services is expected to benefit long-term growth.
Market Position
EA has a dominant position in sports games with a robust game pipeline ahead, driving future growth.
Shareholder Return
EA announced an accelerated stock repurchase program, increasing total shareholder return.
Negative Factors
Competition
There is a risk of more intense competition in the gaming industry post-pandemic, which may lead to slower revenue growth.
Game Performance
The magnitude of Apex Legends’ decline was surprising, leading to a significant headwind on total Bookings.
Game Releases
There is caution on the success of the upcoming Battlefield due to CoD’s increased dominance in the Shooter category.
Electronic Arts Inc. (EA) vs. S&P 500 (SPY)
Market Cap
$36.92B
Dividend Yield0.52%
Average Volume (3M)3.30M
Price to Earnings (P/E)34.7
Beta (1Y)0.55
Revenue Growth-0.81%
EPS Growth-9.28%
CountryUS
Employees13,700
SectorCommunication Services
Sector Strength87
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)1.35
Shares Outstanding250,765,980
10 Day Avg. Volume3,818,648
30 Day Avg. Volume3,303,997
Financial Highlights & Ratios
PEG Ratio36.98
Price to Book (P/B)5.34
Price to Sales (P/S)0.00
P/FCF Ratio20.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$168.76Price Target Upside12.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Electronic Arts Inc. Business Overview & Revenue Model
Company DescriptionElectronic Arts Inc. (EA) is a leading global interactive entertainment company that develops, publishes, and delivers games, content, and services for consoles, PCs, and mobile devices. Established in 1982 and headquartered in Redwood City, California, EA operates in sectors such as gaming, interactive entertainment, and digital distribution. Its core products include popular gaming franchises like FIFA, Madden NFL, Battlefield, The Sims, and Apex Legends, which are delivered through various platforms including EA Sports, EA Games, and EA Play.
How the Company Makes MoneyElectronic Arts generates revenue primarily through the sale of video games and related content across various platforms, including consoles, PCs, and mobile devices. The company makes money through three key revenue streams: game sales, live services, and subscription services. Game sales include initial purchases of full games, which can be physical or digital. Live services encompass in-game purchases, downloadable content (DLC), and microtransactions, where players buy virtual goods or enhancements to improve their gaming experience. Subscription services, such as EA Play, offer access to a library of games and early trials for a monthly or annual fee. Additionally, EA benefits from strategic partnerships with major technology companies and sports leagues, which enhance its game offerings and extend its market reach.
Electronic Arts Inc. Key Performance Indicators (KPIs)
Any
Bookings by Segment
Shows the distribution of bookings across different business segments, highlighting which areas are driving sales and where there might be opportunities or challenges.
Shows the distribution of bookings across different business segments, highlighting which areas are driving sales and where there might be opportunities or challenges.
Data provided by:
Main Street Data
Main Street DataElectronic Arts Inc. Financial Statement Overview
Summary
Electronic Arts shows strong financial health with solid profitability, efficient equity use, and robust cash generation. The income statement reveals strong profitability margins, although revenue growth is moderate. The balance sheet remains stable with prudent leverage, and cash flow metrics indicate strong cash generation despite some recent pressures.Income Statement
Electronic Arts demonstrates strong profitability with a consistent gross profit margin and net profit margin over the years. The TTM (Trailing-Twelve-Months) data shows a gross profit margin of approximately 78.35% and a net profit margin of 14.28%, indicating efficient cost management. Revenue growth has been moderate, with a slight decline noted in the latest TTM compared to the previous annual report. EBIT and EBITDA margins are healthy, reflecting robust operational performance.85
Very Positive
Balance Sheet
The company maintains a stable balance sheet with a debt-to-equity ratio of 0.25 in TTM, indicating prudent leverage levels. The return on equity is solid at 14.15%, showcasing effective use of shareholder funds. However, the equity ratio of 55.10% suggests a moderate dependence on liabilities, which is typical for the industry but may pose risks if liabilities grow significantly.78
Positive
Cash Flow
Electronic Arts has demonstrated strong cash flow generation with a substantial free cash flow growth rate of 40.85% in the latest annual period, although it shows a decline in the TTM. The operating cash flow to net income ratio is approximately 2.01 in TTM, indicating excellent conversion of earnings into cash. However, the free cash flow to net income ratio shows a decrease in TTM, suggesting potential pressures on free cash flow sustainability.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.34B | 7.56B | 7.43B | 6.99B | 5.63B | 5.54B | Gross Profit |
| 5.75B | 5.85B | 5.63B | 5.13B | 4.13B | 4.17B | EBIT |
| 1.45B | 1.52B | 1.33B | 1.13B | 1.05B | 1.45B | EBITDA |
| 1.90B | 1.99B | 1.81B | 1.61B | 1.23B | 1.70B | Net Income Common Stockholders |
| 1.05B | 1.27B | 802.00M | 789.00M | 837.00M | 3.04B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.15B | 3.26B | 2.77B | 3.06B | 6.37B | 5.74B | Total Assets |
| 13.45B | 13.42B | 13.46B | 13.80B | 13.29B | 11.11B | Total Debt |
| 1.95B | 1.95B | 1.88B | 1.96B | 1.88B | 996.00M | Net Debt |
| -827.00M | -952.00M | -544.00M | -773.00M | -3.38B | -2.77B | Total Liabilities |
| 6.04B | 5.91B | 6.17B | 6.17B | 5.45B | 3.65B | Stockholders Equity |
| 7.41B | 7.51B | 7.29B | 7.63B | 7.84B | 7.46B |
| Cash Flow | Free Cash Flow | ||||
| 1.89B | 2.12B | 1.34B | 1.71B | 1.81B | 1.66B | Operating Cash Flow |
| 2.11B | 2.31B | 1.55B | 1.90B | 1.93B | 1.80B | Investing Cash Flow |
| -226.00M | -207.00M | -217.00M | -2.80B | -505.00M | -1.36B | Financing Cash Flow |
| -1.81B | -1.62B | -1.60B | -1.62B | -15.00M | -1.36B |
Electronic Arts Inc. Technical Analysis
Positive
149.57
Price Trends
144.28
Positive
139.39
Positive
144.96
Positive
Market Momentum
2.15
Positive
54.18
Neutral
18.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EA, the sentiment is Positive. The current price of 149.57 is above the 20-day moving average (MA) of 148.64, above the 50-day MA of 144.28, and above the 200-day MA of 144.96, indicating a bullish trend. The MACD of 2.15 indicates Positive momentum. The RSI at 54.18 is Neutral, neither overbought nor oversold. The STOCH value of 18.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EA.
Electronic Arts Inc. Risk Analysis
Electronic Arts Inc. disclosed 26 risk factors in its most recent earnings report. Electronic Arts Inc. reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Electronic Arts Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $66.47B | 16.77 | 23.93% | 2.40% | 1.26% | 6.84% | |
77 Outperform | $31.36B | 10.09 | 9.14% | ― | -2.60% | 16.71% | |
76 Outperform | $36.92B | 34.67 | 16.13% | 0.52% | -0.81% | -9.28% | |
73 Outperform | $53.89B | ― | -460.30% | ― | 30.24% | 27.61% | |
63 Neutral | $1.91B | 13.55 | -220.61% | 8.05% | 1.64% | -32.31% | |
60 Neutral | $40.51B | ― | -51.45% | ― | 1.00% | -148.89% | |
60 Neutral | $14.02B | 6.62 | -2.88% | 3.71% | 2.35% | -37.08% |
* Communication Services Sector Average
Performance Comparison
EA
Electronic Arts Inc.
149.57
22.50
17.71%
BIDU
Baidu
89.18
-21.40
-19.35%
NTES
NetEase
122.76
20.65
20.22%
TTWO
Take-Two
232.34
84.50
57.16%
PLTK
Playtika Holding
5.02
-3.39
-40.31%
RBLX
Roblox
80.77
47.87
145.50%
Electronic Arts Inc. Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q4-2025)
| % Change Since: -3.22%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call indicated significant successes in American football, The Sims, and the launch of a new IP, alongside challenges such as a decline in Apex Legends and initial slowdown in EA SPORTS FC. Overall, the company demonstrated strong growth and financial returns, suggesting a positive outlook despite some hurdles.Q4-2025 Updates
Positive Updates
Record Performance in American Football
American football ecosystem surpassed $1 billion in net bookings, up over 70% year-over-year, with hours played up 68%.
Strong Growth in The Sims Franchise
The Sims delivered over 30% net bookings growth in Q4, attributed to the 25th birthday celebrations and re-release of legacy titles.
Successful Launch of New IP Split Fiction
Split Fiction from Hazelight Studios sold nearly 4 million units, significantly outperforming expectations.
FC Mobile Expansion and Engagement
FC Mobile saw new player acquisition and daily active users up over 20% year-over-year, with double-digit growth in net bookings.
Financial Performance and Shareholder Return
Generated strong free cash flow and returned over $1 billion to stockholders through repurchases and dividends.
Negative Updates
Apex Legends Decline
Net bookings for Apex Legends expected to decline approximately 40% year-over-year, impacting overall growth projections.
Softness in Full Game Sales
Net bookings for full games were impacted by softer sales in FC25 and a transition to a more focused slate.
Temporary Slowdown in FC
Temporary engagement and monetization slowdown in EA SPORTS FC after the rebrand, requiring significant updates to regain momentum.
Company Guidance
During Electronic Arts' Fourth Quarter and Fiscal Year 2025 earnings call, significant guidance was provided by CEO Andrew Wilson and CFO Stuart Canfield. They highlighted the company's robust performance, with Q4 net bookings at $1.8 billion, up 8%, and an annual net revenue of $7.46 billion, reflecting a 1% decline year-over-year. The company's American football ecosystem surpassed $1 billion in net bookings, showing a 70% increase year-over-year. EA SPORTS FC experienced a resurgence with engagement up double digits after a major gameplay update, and The Sims franchise achieved a 30% growth in net bookings in Q4. Electronic Arts returned over $1 billion to stockholders during the fiscal year through repurchases and dividends, and they anticipate net bookings of $7.6 billion to $8 billion for FY26, with Battlefield and Skate launches expected to drive growth. The company is also focused on leveraging AI to enhance creativity and player engagement, reinforcing their strategy for sustainable long-term growth.Electronic Arts Inc. Corporate Events
Stock BuybackDividendsFinancial Disclosures
EA Declares Cash Dividend Amid Strong Financial Results
Positive
May 6, 2025
On May 1, 2025, EA’s Audit Committee declared a cash dividend of $0.19 per share, payable on June 18, 2025. EA reported strong financial results for the fiscal year ending March 31, 2025, with net bookings totaling $7.355 billion and net revenue of $7.463 billion. The success of EA SPORTS and The Sims contributed to a record year, positioning the company for growth with upcoming releases like Battlefield in FY26. EA also repurchased 17.6 million shares for $2.5 billion during the fiscal year.
Spark’s Take on EA Stock
According to Spark, TipRanks’ AI Analyst, EA is a Outperform.
Electronic Arts’ overall stock score reflects strong financial performance and positive technical indicators, although a high valuation and mixed earnings call outcomes temper the outlook. Key strengths include solid profitability and cash generation. However, challenges such as underperformance in major titles and a high P/E ratio suggest caution. The company’s strategic initiatives and optimism for future growth provide a balanced view.
To see Spark’s full report on EA stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.